India installs 4.8 GW of solar in the first half of 2017, surpassing all of 2016

According to an update released by Mercom India Research, the Indian solar market added 1,869 MW in the second quarter of 2017. This brings the total installations in the first half of the year to 4,765 MW, effectively eclipsing the 4,313 MW installed in all of 2016.

“The Indian solar market had its best first half and is on pace to have its best year. However, uncertainty around GST rates, utilities renegotiating to get better rates, and the recently initiated anti-dumping case has stalled momentum in the sector and could have a significant negative effect on installations in 2018,” said Raj Prabhu, CEO and Co-Founder, Mercom Capital Group.

Cumulative solar rooftop installations crossed a significant milestone of 1 GW at the end of Q2 2017 with Andhra Pradesh becoming the first state in India to install over 2 GW of solar. At present, seven states have exceeded 1 GW of solar installations.

Approximately 3.4 GW of solar was tendered in Q2 2017 compared to 1.85 GW in Q1 of this year. The pipeline of Indian utility-scale projects under construction is currently 12.2 GW with about 6.3 GW of tenders pending to be auctioned.

The GST rates were announced in July, but there is still a lot of ambiguity surrounding them. Initially, a rate of 5 per cent was announced for all solar components, which was then clarified to 5 per cent only for solar modules and 18 per cent or more for other components. The most recent update is that the Ministry of New and Renewable Energy is pushing for a 5 per cent rate, though nothing is official yet.

The second quarter saw the lowest ever tariff of Rs 2.44 per kWh in the recently conducted 500 MW Bhadla Phase-III Solar Park auction. Most utilities now want a similarly low tariff, which has led to delays in PPA signings, tenders, and auctions. To this, Priya Sanjay, Managing Director, Mercom Communications India, said, “Most projects under construction will not be affected, but new tender and auction activity has stalled and most developers are taking a pessimistic view of the recent developments.”